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This is a great overview. I would be very interested in seeing a followup on the "air war" subject: not just PR, but social proof and validation in general. Get

This is a great overview. I would be very interested in seeing a followup on the "air war" subject: not just PR, but social proof and validation in general. Getting a warm introduction and a set of meetings is not a trivial task, and "hacking" the organization's structure and needs even less so. But oftentimes, the final barrier to a sale -- especially for early startups -- is social proof. In the back of his or her mind, the buyer is probably thinking things like: "Will these guys be around in 5 months?" As a small startup, the burden of proof rests entirely on your shoulders. The bigger guys have already proved themselves, and, while your service may be much better -- and while the potential customer may totally understand that -- the incumbents have incumbency going for them. That's no small advantage. Another key thing to consider: departments (or people) within any given company tend to be profit centers, cost centers, or some hybrid of the two. They have very different goals, and hence, their people have very different motivations. Some people are empowered to take risks, and others are extremely risk averse. Pitching topline growth to a department mainly concerned with managing downside, for example, isn't going to get you very far. To your point, it's typically more effective and realistic to pitch topline growth. But if that's going to be the case, then figuring out who at Company X is actually empowered to take chances on growth is a big priority. The number of these people in any given organization can be extremely small, even at large enterprises.

brandonb 13y ago
Great points on social proof and profit centers and cost centers. If you're pitching top-line growth, then often you want to start at the top (CxO level if you can). How to run the "air war" could be a whole post. I think PR is the most important component, and you can actually get very far as a founder by just sending a journalist a friendly note and offering to talk. Quality of investors, team, and whether you have a personal connection to the company also matter a lot.
- jonnathanson 13y ago
  "How to run the "air war" could be a whole post." Indeed, and while I realize it's somewhat tangential to your article, I'd love to see your in-depth take on it at some point.
AndyNemmity 13y ago
I'm not really thinking about if they will be around in 5 months... I assume they will if it's an idea I'm willing to buy. It's not even a question for me. Incumbency is an advantage, and a weakness. Everyone hates what they have for some reason. Incumbency is rarely the issue. The profit centers/cost centers idea is VERY true. I am empowered to take risk, and the people I have to change their systems are risk adverse. So you have an immediate issue that I have to deal with. The best thing you can do to help me is have a business case vs. a competitor or competing idea already outlined. Somehow startups rarely have this simple information prepared. It shouldn't be a shock to you that we're currently doing X.. instead of your Y. Why is your Y better than X in business terms?
- eitally 13y ago
  The other thing, too, is that it's pretty common for contacts with large companies to include a software escrow clause (in relation to force majeur or other eventuality leading to the vendor becoming unable to continue servicing the customer). Whether the customer can keep the thing alive without the vendor's help is another matter entirely.
notahacker 13y ago
I like your analysis of how pitching a solution depends on who you're talking to. If your service is a CRM system, you should probably be simultaneously be pitching it as leadgen to the sales and marketing directors and efficiency improvement to the COO and CFO. The topline vs cost-cutting pitch also depends on the product. If your service is designed to cut legal bills, like one YC company featured on here yesterday, then pitching it as driving growth would be just stupid. I also flatly disagree with the OP, in that I think in most industries "Our solution will cut your spend on X by 10%" is a much stronger claim than "Our solution could potentially increase your revenue by 10%"; even though the latter will usually represent a higher potential ROI. Rational purchasers are more confident of the savings generated by substituting for a product/process with known costs than they are of achieving theoretical revenue gains.
- eitally 13y ago
  It depends. If your product is obviously a revenue empowerment tool, then sure, pitch that, but that is not usually the case. Even money-making software is still effective because it automates manual processes, which is a cost savings... it just happens to be automating processes most companies don't actually perform at all.

brandonb 13y ago

Great points on social proof and profit centers and cost centers. If you're pitching top-line growth, then often you want to start at the top (CxO level if you can). How to run the "air war" could be a whole post. I think PR is the most important component, and you can actually get very far as a founder by just sending a journalist a friendly note and offering to talk. Quality of investors, team, and whether you have a personal connection to the company also matter a lot.

jonnathanson 13y ago
"How to run the "air war" could be a whole post." Indeed, and while I realize it's somewhat tangential to your article, I'd love to see your in-depth take on it at some point.

AndyNemmity 13y ago

I'm not really thinking about if they will be around in 5 months... I assume they will if it's an idea I'm willing to buy. It's not even a question for me. Incumbency is an advantage, and a weakness. Everyone hates what they have for some reason. Incumbency is rarely the issue. The profit centers/cost centers idea is VERY true. I am empowered to take risk, and the people I have to change their systems are risk adverse. So you have an immediate issue that I have to deal with. The best thing you can do to help me is have a business case vs. a competitor or competing idea already outlined. Somehow startups rarely have this simple information prepared. It shouldn't be a shock to you that we're currently doing X.. instead of your Y. Why is your Y better than X in business terms?

eitally 13y ago
The other thing, too, is that it's pretty common for contacts with large companies to include a software escrow clause (in relation to force majeur or other eventuality leading to the vendor becoming unable to continue servicing the customer). Whether the customer can keep the thing alive without the vendor's help is another matter entirely.

notahacker 13y ago

I like your analysis of how pitching a solution depends on who you're talking to. If your service is a CRM system, you should probably be simultaneously be pitching it as leadgen to the sales and marketing directors and efficiency improvement to the COO and CFO. The topline vs cost-cutting pitch also depends on the product. If your service is designed to cut legal bills, like one YC company featured on here yesterday, then pitching it as driving growth would be just stupid. I also flatly disagree with the OP, in that I think in most industries "Our solution will cut your spend on X by 10%" is a much stronger claim than "Our solution could potentially increase your revenue by 10%"; even though the latter will usually represent a higher potential ROI. Rational purchasers are more confident of the savings generated by substituting for a product/process with known costs than they are of achieving theoretical revenue gains.

eitally 13y ago
It depends. If your product is obviously a revenue empowerment tool, then sure, pitch that, but that is not usually the case. Even money-making software is still effective because it automates manual processes, which is a cost savings... it just happens to be automating processes most companies don't actually perform at all.